markets. here is what we want -- here is what we are watching this hour. equities on track to have their best day in a month. catalysts for today's gains, new manufacturing data. slump may be easing. has manufacturing turns the corner? and the apple fight to keep the fed out of the iphone is taking center stage on capitol hill right now. saying it istor is time for apple to take the guard dogs away and let the feds pick the locks. from the end of trading. julie hyman is looking at the situation. julie: stocks continue to hover

around the highs of the session. we haven't seen a lot of volatility. all major averages now up more than 2%. trading at their highest in seven weeks. appears tot for this have been the manufacturing data coming in better than estimated. continuation of this rally that has been going on since february 11 when we saw the bottom of the year put in for the s&p 500 and the other major averages. look at the s&p 500 over the course of the day and that your directory, it is a slow and steady upward trend as we head towards the closing bell. something is also home -- something notable today is an uptick in value. normally the rally we have seen as a low rally. today, it is the s&p 500 against the one--- 100-day. are seeing a, we

surge in volume in utilities and energy stocks. those are the two groups we are seeing the most active trading. individually, the biggest contributors are big cap tech and big cap banks. these are the most heavily weighted stocks that are up the most in the s&p, that contribution making -- that combination making them contribute the most of the game. we have trimmed losses for the year. the nasdaq has been down the most pretty much year to date. just to put it in perspective, yes, we have seen big ounces, but we are still down for 2016. vonnie: and risk assets are not working today. julie: risk assets performing and those seen a safer

underperforming. the biggestyield is one-day move we are seeing in the 10 year looking back to early december. it is noticeable that we are seeing this upward move. we are also watching the vix, the fear index. you might ask -- as you might expect, that is down. beenhe u.s. dollar has showing strength, particularly against the japanese yen. you have the dollar rallying. natalie you have the u.s. he cannot -- not only do you have the u.s. economic data, but you have the bond sale in china driving demand. vonnie: that was phenomenal this morning. of theme to get a check headlines. the legal fight between

apple and the u.s. justice department is being waged on capitol hill today. a locked iphone ballon into one of the san bernadino shooters and whether belonged toone that one of the san bernadino shooters. director comey: we are asking apple take the vicious dog guard -- guard dogs away. and let us pick the lock. sewall will testify later this afternoon. apple has called the government's request to create specialized software to unlock the phone "dangerous." more than a dozen states and territories will hold primaries and caucuses on this super tuesday. polls indicate donald trump will contests.f the

the big fight is for second place between marco rubio and ted cruz. bernie sanders is hoping to win against hillary clinton in massachusetts. mrs. clinton is heavily favored in the southern states that are holding primaries. join us for a two-hour edition " forith all due respect special coverage. a new york state appeals court reinstated a fraud claimed filed against donald trump. eric schneider them -- action schneidermanic sued trump university. it misled students, according to the attorney general, by saying that they would get valuable real estate experience.

by the time their rush holt -- sian capsulethe rus lands, they will have circled the world 150 times. vonnie: thank you so much. we have seen all the beautiful pictures he sent back. we want to return to the rally now. joe, pretty much at the sessions hide.- session's it all pretty much began this morning. joe: what we saw was the manufacturing data. it came in better than expected.

if you look at the stock market in the u.s., we were up the last two weeks. all the factors driving it forward were external. you had crude oil. -- had people buying squeezing shorts and getting out of short positions. you had people looking at valuations. but there is no real domestic data from the u.s. they give you reason to buy. so this is good news that manufacturing came in above expectations. today, there was the oil announcement as well that there might be some kind of international agreement. joe: yes. today, oil is up again and we are seeing the stock market respond in kind. if you look at domestic economic picture, this is really the first time we have gotten something actionable.

so people are not letting it go to waste. michael mccain spoke with greenspan us morning. the stock market was to find a happy medium, been something that would push up get people to reallocate more towards bonds, they are looking for that happy medium. there is a grand swell -- a groundswell of improvement. the trend is in the right direction. vonnie: if you look at the components of the s&p 500 index, the biggest movers, for example, , range resources, these are not companies you immediately think of when it comes to companies people want to be pouring in on the first day of the month.

joe: a lot of those are momentum names. we have written a lot about the breakdown of the momentum trade. and we attributed the. weakness this year on that it has picked up again -- and we weakness this year on that. it has picked up again. capon, facebook, make a tech names were driving the second half of the bull market. now they are catching fire again. it's resulting in strength in equities. vonnie: some of the strength in equities from the not so highly rated companies. is that something we should take note of? joe: that's a great point. earlier this year, if you look at the spectrum of credit ratings, the further daniel went, the losses were very deep -- the further down you went, the losses were very deep. let we are seeing are the best gains in the triple c, double

d-grade companies. they are the ones who are reaping the benefits of this rebound. just goes to show, bigger picture, people are getting more comfortable with credit conditions and people feeling a little bit less than this is going into 2008 territory. vonnie: how comfortable should we be with the rally today? cash was takent off the sidelines for the first of the month and that might be at? joe -- might be it? joe: yes. really throw things off. the political realm is something that can affect the stock market in ways that a lot of people cannot predict. well this rally be maintained? a lot of people would say you would be smart to take profits are now. views are very, but the average s&p strategist we surveyed in bloomberg are still calling for a gain by year-end. vonnie: thank you so much.

you can read his stories on bloomberg.com. apple's general and the fbi director face-off. access their wife owns, these are pictures live from capitol hill. access to iphones, these are pictures life from capitol hill. is the writerfy linchpin we will talk about -- later, we speak to loretta lynch. surging 2.75%.

vonnie: this is bloomberg markets. let's check in on where the markets are.

highs.p to session next, a look at the dow industrial jones -- dow jones industrial average. and a look at the nasdaq composite index. time now for the bloomberg business flash. authorities looking to file for bankruptcy. sports authority has talked about selling stores and dick'sctual property to sporting goods. is buying a cloud computing company. acrosss companies manage

data centers. tomorrow, the persian gulf airline emirates will capture the title "the world's l ongest flight." the record won't last long. the face-off between apple and the fbi moved to the capital today -- to capitol hill today. earlier, james comey told congress this issue is not necessarily by gaining a backdoor. director comey: there are issues about backdoors. there is already a door on that i found. we are asking -- on that iphone.

we are asking apple take the guard dogs off so we can pick the lock. vonnie: so where does the fight go next? let's ask matt larson. he is our legal analyst in washington, d.c. what do you make of the fbi director's performance? : there were some interesting comments during today's hearing. the fbi towing the line between cyber security protection and procuring warrants for law enforcement. the early part of the hearing show that congress is concerned about the impact on the tech community and legal precedent moving forward, which is really what the major concern with the ongoing litigation between apple and the u.s. government in california is right now. vonnie: it is interesting to see the gop chair and the democratic

chair told that line. tow that line. matt: it is the first time in the context of the litigation and before congress that we have seen the fbi make a little bit of a concession in terms of the precedent that could be laid in this case. any time a decision of this magnitude is made to enforce warrants, that legal decision becomes binding or at least instructive in future cases. hear was interesting to that the fbi was at least caused the scent of the precedent and is starting to make a little bit of a concession for apple's point, that this litigation should impact business practices

going forward. vonnie: the previous line was that there would be no precedent. but we saw the new york case yesterday already potentially being impacted by this. sewall earlier. how much will this appeal to the public and how important is literally the performance of the f ai director and the -- the fbi director and the apple general counsel today? matt: apple is great at creating a line that is consistent with litigation and public appeals in presenting the case as one whole offensive move in the move forward in these disputes. initially, it looked like a good deal of the public may have come out on the government/fbi side of the argument. but instructing the public on why this is important, business here, it is an

important narrative and it is one that will sway the public. looking at the litigation, i don't know that the magistrate judge will be particularly swayed by public interest at this stage. if the litigation goes on to appeal, that is something that judges start to consider when taking a barometer of what the different legal issues at play here are. but it's always important when you are giving testimony to provide your best case. vonnie: at the beginning, there was colorful language from images used by the fbi director. i want to ask you about the microsoft response. first of all, [indiscernible] really are the public testimonies from the ceo and the legal part of microsoft -- are they at one? matt: that's a great question. to -- it had the time

haven't seen microsoft's amicus brief. but the initial indication sam do like the tech community is cohesive in its defensive cyber security measures and protecting visibility to code and to not code when helping the government executed warrant. i think that will be a fairly unified voice. but even within that community, there is some concessions on where the appropriate line is. under what circumstances maybe is it appropriate to assist law enforcement further than what they do now? the fbi director said that all tech companies have done nature medicine menace job in assisting in these investigations. it's just a matter of -- have done a tremendous job in assisting in these investigations. vonnie: thank you. options, and sides, and some of the biggest movers

on the day. up 6%. areadviser and yum! brands some of the top gainers of the day as well.

julie: joining me for today's insight is kevin kelly. this seems like the culmination of the past few weeks. we've had this bounce from the lows for the s&p 500 index. and today, it is happening more with a bang instead of this gradual upturn. optionswise, are you seeing a conviction for the rally going on? kevin: it's exit the two biggest sectors in the s&p 500 -- financials and technology leading the way. they've been lagging for the

last while, especially in financials. in the options market, you see everybody putting on hedges for today. this never been a better day to hedge all year. , thee seeing the v vix volatility of volatility, down. over the last six months, we have seen average 100. that a significant -- that is significant. julie: i'm going to ask you to pause because we have a chart of that on the board. so there you have the sp y put call ratio. 1.6 puts toatio, call, the volume today appeared as you say, a lot of people are following your advice i guess, saying it is a good day to hedge against the rally. kevin: that 1.6 number shows you

puts..6 the amount of on a day like this, you expect a lot of bullishness, paying for future upside. but they are not doing that. they are taking what is happening in the market and buying more downside protection. julie: that may indicate that the rally is not going to continue? or that there is not a lot of faith that it will continue? it is indicating a a lot of uncertainty out there because we are still trading at 17 times earnings on the s&p 500. nothing has really changed on the macro basis. we are at a running season. because there are still a lot of uncertainty and things have not been resolved, people are still going out there and hedging. you are looking at buying a call spread here. my facebook right now? kevin: facebook has been one of the leaders. this is a great trade, especially if you want to do it on the spx. the most you can lose is what

you are paying out there, but you're still getting a lot of upside. so we are getting out to april. you can place a long position or this.n do it cost to $2.50. you're going to april, buying a call spread on the 110, 117. we saw a 52-week high on facebook. the most you can lose is to illustrate be sense, but you do get the upside in there. julie: thank you so much. we will continue watching the call ratios. we will be right back with more bloomberg markets and more on this rally. ♪

you are watching bloomberg markets. let's get a check of the headlines. sanders says he

needs high voter turnout to do well in today's super tuesday races. he voted in his hometown of burlington vermont. he trails hillary clinton in most of the states being contested. putld trump is hoping to some distance between himself and his rivals on the republican side. trump is leading in almost all of the super tuesday states, except for texas, ted cruz's home state. join us at 5:00 p.m. new york time for a special two-hour edition of "with all due respect those quote for extensive super tuesday coverage. new hampshire's largest newspaper now says it was wrong to endorse chris christie for president. joseph mcquaid said in an editorial, "boy, were we wrong."

the editorial follows governor chris christie's endorsement of donald trump. you are now looking at a live shot of the house judiciary committee holding a hearing on encryption and privacy. fbi director james comey is testifying. director comey: we are owned by the mecca people. with only use the tools given to us under the law. it is our job sibley to tell people there is a problem. everybody to -- everybody should care about it. if there are warned-proof spaces in life, what does that mean, what is the cost of that, and had we think about that? mark: bruce sewall will appear in the second session. the company is fighting a court the fbiquiring it help break into an iphone the lying

to san bernadino shooter syed farook. apple has called the request "dangerous." spacex plans to make another falcon 9 launch attempt tonight. the company plans to launch during a 90-minute window that opens at 6:35 new york time. that is slightly earlier than previous attempts. to takes hoping advantage of an upper-level wind profile. vonnie: thank you so much. andets close in 30 minutes the nasdaq is leading this rally.

abigail: we are looking at a huge rally at the nasdaq today. it is up 2.5%, accelerating throughout the day. the index is having its best day since september 8 of last year. the strength is being led by number of sectors, including technology, consumer discretionary, and biotech. the biggest point boost is apple. shares are up about 4%, back above the psychologically important $100 level on continued news flow around the company profited -- the company's battle. the stock appears to be acting as a tailwind. apple is back above its 50-day moving average. in this case, last time apple was above that, three rallies and then a big fall. we will have to keep a close eye here. only three stocks are down. leading the charge to the

downside is tesla in the context of the bearish treat from citroen research saying the firm , saying it the stock could drop. andrew lest, a vocal bear and short on valiant starting back in september of last year. is there any real performance today? abigail: on the outperformance side, nothing really stands out too much. but on the downside, we have one wild stock. i it, but on the year. pc therapeutics down more than 80% this year after the fda rejected a request, an application on one of the company's key drugs. lots of downgrades today on ptc therapeutics. vonnie: thank you so much.

scotia bank scored, 6% after it big first -- shares of .cotia bank soared to 6% after talk about the oil and gas exposure of social bank, bank of nova scotia, and how that portfolio performance. saw across all across the six banks in canada, there are more provisions being put in for losses. i asked brian porter to elaborate. brian: i think the narrative on energy got far too negative. we have been at this for decades. n energy lender with years of experience. going to have a few

fender bender, but our portfolio is performing as we expected under current conditions. i think they'll market is starting to realize that maybe it got a little bit ahead of itself. >> certainly the loans -- we talked about provisions for credit losses having to rising little bit, lines of credit or lending commitments that are out there, which you report a somewhat has been drawn from energy companies, you have any concerns about undrawn parts of the credit line. brian: they are high quality companies where we have comfort with the management team and their ability to execute. as is where we thought and we are capital with our exposures. pamela: that is essentially what all the banks have been saying. only one of 3% of their

portfolio in there alone books are exposed to the energy market. vonnie: it seems a day doesn't go by that we don't hear about a european bank going out of emerging markets. scotia bank is widely dispersed across emerging markets. this bank is the most international of the canadian banks. he is speaking specifically about latin america. a year ago, investors were worried about what this side of the business would mean for scotiabank. they had huge growth and i will let him explain how that went in south america. defined by where we aren't geography. in mesko in chile and mixed -- in mexico and chile and columbia, those will grow 1% to 3%. pamela: argentina has a new

government. i know that was not a great history for you. tour brazil, in a more meaningful way. >> we've got a small business in brazil and we are fine with that. and argentina, we are -- we have no desire to go back. pamela: in argentina, not so itg ago, when -- a bitter of -- a bit of a bitter taste in their mouth. vonnie: thank you so very much. the canadian dollar having a difficult time of it, above 1.34. up next, has manufacturing in the u.s. found its footing? the manufacturing index climbed last month. we will have a look at that question. and here's a look at the sectors. everything is green except for

utilities.

vonnie: a quick check on the markets. let's take a look at the dow jones industrial average. the s&p 500 is up 2.1%. and the nasdaq leading the indices, up 2.5%. on capitol hill, fbi director director comey: still testifying -- fbi director comey still

testifying. we are still awaiting testimony from apple general counsel bruce sewell. the stock has been climbing all day. apple is up 3.7%, along with other stocks in the s&p 500. it is time for the bloomberg business flahs. -- business flash. honeywell is no longer willing to do business with united technologies. there are antitrust concerns. u.s. sales declined for the fourth straight month. the german automaker is having trouble attracting customers after the cheating scandal. dreamworks ceo jeffrey katzenberg says his company would be interested in combining with paramount if they could find a financial partner to back the deal.

his companyays doesn't need a merger partner. and tv investments in recent years are beginning to bear fruit. one reason behind today's market rally is u.s. manufacturing in february. it did shrink, but less than forecast. stabilization may be in the works. even if the data was still native -- still negative, that could still be the case. joe, it was -- joe: any time the data is below 50, that indicates the area stilling contraction. a, the data was better than last month. like newok at things

orders and employment, those are both positive. what they signal is a, improvement. and b, the things that really matter, good things for the future. this is clearly a better-than-expected report. vonnie: what about exports? did we notice anything on the exports index? joe: you totally stumped me. there we go. we are coming up to the march meeting by the fed. they will have to look at the fact that it's bounced by two things. one is the factor that employment did in the u.s. is god. and inflation -- in the u.s. is good. and inflation data is good.

vonnie: we did also get the market u.s. manufacturing pmi. joe: it is a younger series. they haven't been around as long so markets don't pay a lot of attention to it. the isn was better than the market data. vonnie: the interesting thing , they are front and center. in january and february, there was more recession calls than we have had in a long time. a lot of those calls have faded. the data seems to have stabilized. but more importantly is the market. when the market stabilizes, people certainly more positive stories. when the market goes down, people tell more negative stories. the underlying data has been pretty stable throughout the entire year.

it's really been the public markets that have been volatile. i think it's the public markets that are informing the stories people are telling. vonnie: and the other economic data we'll be looking for this week, will you be watching for? joe: excited to see initial jobless claims. as long as it stays in the general downtrend, that's a good sign. friday, nonfarm payrolls, the big one. we will be seeing if the unemployed and rate continues to drop, but also the wage gains we have been seeing continued to accelerate. if we do, that adds another reason for the fed to consider raising rates at our forthcoming meeting. headlines from loretta lynch, she is speaking at the security conference in san francisco. the attorney general is saying that they are going to resubmit

the new york case on iphone access. this relates to a case where the judge found in apple's favor. and also asking apple access, like you has done for years, this would be in reference to complieds fourd by apple. had "an we haven't awful parade of [indiscernible] both sides are using colorful of language in this case. resubmit thet will new york case. that ruling came against the government and for apple earlier this week. thank you for joining us. we will watch out for more on d youd you miss -- "what'

miss?"the close of trading 13 minutes away . the gains.

vonnie: this is bloomberg markets. markets close in about 10 minutes. julie: march tens to be a positive month for stocks. nevertheless, this is a blockbuster start to the month by any account. we have not seen the highs we have seen today in quite some time. stocks bouncing back also sharply from the lows they closed at on february 11.

if you look at what is rally today, you can take your pick in terms of the sectors. utilities are lower. but otherwise, everything is up. we haven't seen many big rallies without the participation of the two groups. individually, you also see the tech and banks represented. apple, microsoft, jpmorgan are contributing more to the gains in the s&p 500. if you look at stocks versus oil, oil prices now headed higher on the day. i really in midmorning, we had them bouncing around unchanged. it didn't seem to put a dent in the rally in stocks. however, when oil took off, that is when the rally and stocks took off more decidedly as well and coming into the highs of the session. member the companies came out with their auto sales today.

gm rising even after his sales fell 4.5% last year. fourth straight month of increases. c --tron --arch citron came out and mentioned tesla and we saw it fall off. we see the biggest one-day move upward in yield on the 10 year since december. we have the manufacturing data this morning coming in better than estimated. after we got the number, that is when we saw the upward movement in the yield. vonnie: it has been a fascinating dayvonnie:, all things considered. markets may be roaring into the green for march. but not everybody is bullish. here is doug ramsey making the

bear case. reasonable market for a cyclical bear market, this would be an average cyclical bear market, wouldn't necessarily be one that entailed an economic recession. which is down to 1600, which would be eight when he 5% decline. i think that is a likely outcome once this rally has run its course. 1600?: is ramses call possible? oliver: it is possible but a precipitous drop. a debt id out that think a big part about his call is you do not need an economic recession to go with it. and his earnings estimates reflect that as well. he is basically saying, after you get through all his fairly complex math that is behind his data, he thinks earnings will be

worthwhile. if you will have five-year earnings expectations, it will be around 16. that is a little lower than where we are now. but it is not grossly below historical averages. i think that adds some clarity to his call and makes it more compelling to some because some people bring in recession and bear market and they tie the two together. but that is a bit of a fallacy. he points that out. we don't need to have a huge breakdown on the economic front. we can still get there for other reasons. vonnie: it would take a huge amount of selling on a part of institutions, probably retail, probably pension funds and insurance. i mean come a lot of sailing. there were -- a lot of selling. there would be some kind of catalyst. oliver: bank of america had a report looking at the rally this last week. you had institutions selling good hedge funds selling. and you had the high net worth clients and mom-and-pop's

selling as well. the question is who is buying? they point to largely corporations. the question has to be answered to figure out if we can get down to 16 at companies are going to stop buying back their own stock , if you are going to have that loss of support for color the market that has been very important. vonnie: it's quite terrifyingvonnie:. if it does come to pass, that it could have ulcerative of the consequences. oliver: that's right. no but he likes to see the market down 25%. a great call on the rebound in august and he has a solid track record here. but he looks at it from a quantitative standpoint. i think there's a lot of fundamental -- you want to -- you won't have any problems finding people looking at the fundamentals of the economy and say that it is strong enough to hold higher prices. but i think you need to see more conviction and stabilizing the

commodity space and in the oil space. today is a good xml. -- a good example. vonnie: we should point out that, the dow jones industrial average is still down 8%. oliver: right. just a reminder, emily chang will have an exclusive interview with attorney general loretta lynch at the top of the hour here on bloomberg television. that is it for bloomberg markets. ♪

scarlet: we are moments away from the closing bell. joe: i am joe weisenthal. "what'd you miss?" alix: i am alix steel.

u.s. stocks closing higher, a seven-week high. joe: the question is "what'd you miss?" donald trump and hillary clinton expected to pull away from the pack. joe: bernie sanders isn't out of the race yet. how a bald economic plan can get the u.s. to 5% gd growth -- gdp growth. we begin with our market minutes, u.s. equities at session highs, risk on. we opened higher and never looked back, a steady climb high